Consider if you will the number of different "hats" worn by a title agent during the course of any real estate transaction. Title agents not only examine title, they are also responsible for facilitating the closing, managing enormous escrow accounts and for drafting an insurance policy that protects the interests of lender and owner.
Consider if you will the complex fiduciary duties of the title agent. Title agents are legally bound as the fiduciary of the purchaser, lender and title insurer. Lender is defined as the actual source of funds and not the loan officer or mortgage broker.
Interestingly, the title industry doesn't have a uniform code of ethics that's generally recognized. Ask your title agent to produce a copy of a code of ethics. I'd be curious to know the response. It seems strange that an industry that willingly accepts a significant degree of risk and burden would be reticent about publishing behavioral guidelines. A draconian version of a code of ethics exists, but it's well concealed and rarely referred to.
A report issued by the Government Accountability Office in April, 2006 entitled "Title Insurance: Preliminary Views and Issues for Further Study" illuminates many of the architectural weaknesses of the title industry The report is available on line and well worth reading. The industry is essentially policed by the insurance commissioners of individual states who often look to title underwriters for guidance. It's a system that's broken and needs to be fixed.
There's currently a small movement within the industry to establish a relevant and practical set of ethical guidelines. We live and work in a virtual age, technology should play a role in the project. Why not a web-site that serves as a virtual mentor to title agents? It could be living guide, updated often to redefine the shifting dynamics of the industry. Along with examples of proper behavior, the site could effectively include examples of improper behavior detailing case studies and any recent indictments, convictions, class action suits and RESPA actions.
In essence, the web-site could be a relevant and living code of behavior for the title professional; not a static document; not an underwriting manual.
It seems to me that a similar system might work for realtors.
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